Tribune's vision goes well beyond online newspapers

More than any other newspaper publisher, Tribune Co.'s
tentacles on the Internet stretch far beyond its core business.

In just four years, the company best known for owning the
Chicago Tribune, WGN-TV and the Chicago Cubs has spent $125
million to launch or invest in more than 20 online properties. Its
roster of investments ranges from local online service Digital
City to America Online to e-mail service Mercury Mail to online
grocery shopper Peapod.

What does all of this have to do with newspapers and TV? Not
much, on the surface. But Tribune wants to be on the leading edge of
emerging media, no matter how technology, commerce and usage
patterns shake out.

"Our motto is to be nimble and quick," said Tim Landon,
VP-strategy and development for Tribune Publishing, explaining the
company's light-speed approach to the Internet.

Tribune Publishing, meanwhile, has poured an additional
$25 million since 1995 into partnerships and wholly owned
properties, the latter of which include BlackVoices on AOL and the Web,
online versions of its four newspapers and exclusive rights to
Digital City in its four newspaper markets

Digital City, which is 20% owned by Tribune and 80% owned by
AOL, offers local news, information and entertainment, with
plans to serve more than 100 towns and cities.

CAREER CHOICE

Tribune Publishing also is an owner of CareerPath, an
employment information service formed in October 1995 with The Boston
Globe, Los Angeles Times, The New York Times, San Jose Mercury News
and The Washington Post.

It has partnered with Knight-Ridder on Destination
Florida, an AOL- and Web-based tourism information service, and
with Cox Communications, Knight-Ridder and Advance
Publications on a real estate listings service called Interealty, a
proprietary service for real estate agents.

"Tribune Co. has been a pioneer. It has a very aggressive
new-media strategy to diversify its business and extend its brand
across a variety of distribution channels," said Randy Bennett,
VP-new media for the Newspaper Association of America.

"We think the Internet is a whole new medium, and we want to
be there first. That's the way you are able to learn the most and
learn it at the least cost," said Donn Davis, president of Tribune
Ventures. "It's easier to fail early. We don't see our interactive
businesses merely as an extension of what we are doing [in other media].
It's partly an extension, but some of them are entirely new
businesses."

Gaining knowledge about new media is key. Said Mr. Landon,
"Our primary reasoning is that we want to invest in companies
that can help us learn and grow in the new-media world, because
they have the knowledge, people, technology or distribution
that we think has some breakthrough quality. We want to get as
much sharing and learning between that business and our
operations."

For example, the company's investment in Peapod, of which
it now owns 13%, has given Tribune executives insight into how
retailing is poised to change and how advertisers are responding to
online shopping.

DISTRIBUTION LESSON

Its 7% stake in Excite, an Internet search company, has
given executives firsthand experience with how content
distribution is handled on the Internet and has offered the company a
means to develop relationships with others in Silicon
Valley.

With CheckFree, an electronic payment company, and Open
Market, a transaction software company, Mr. Davis and his
colleagues are learning about electronic commerce.

"There will be a merger of online content and commerce, so
being involved in things like Open Market and CheckFree is very
positive," said Bill Bass, director of media strategies at Forrester
Research. "The same goes for Peapod. A fairly significant chunk of
newspaper advertising comes from grocery stores. So if online
becomes an important channel for them to reach consumers, the
Tribune as a newspaper will be very well suited to say `we know all
about that, we have a solution.' "

SEEKING RETURNS

There's another reason for Tribune's aggressive
strategy.

"There are only three things that matter to public
companies," said Mr. Davis. "Returns, returns, returns. That's why we
are so aggressive in interactive services. We think it will
provide better shareholder returns than other strategies."

Tribune Publishing ventures:

Black Voices
African-American community sitecurrently on AOL, but expanding to the Web.AOL keyword: Black Voices

Mr. Davis said Tribune Ventures' $100 million investment
in Internet properties is worth $300 million to $350 million
today.

Media analysts and newspaper industry insiders applaud
Tribune for its proactive stance regarding the Internet. But they
are quick to point out the risks.

"There is nothing [in Tribune's new-media lineup] that
makes no sense, except that something might crater," said Mr.
Bass. "All of these intellectually might make sense, but whether
they will pay off financially in the long run is a question."

To Tribune's credit, Mr. Bass points to its 2% stake in AOL
as a good omen.

"Tribune made a great investment in AOL; it could just as
easily have chosen Prodigy or CompuServe," he said. "It is in the
right areas, but only time will tell if it has picked the right
companies within those areas."

Others consider the variety of Tribune's Web portfolio to
be somewhat curious.

"Tribune has been a leader in interactive investments
since its investment in AOL in the early `90s," said Peter
Krasilovsky, VP of new-media consultancy Arlen Communications. "It has
invested in a wide range of products, plus it has its own home-grown
products. But you wonder if some of the companies are synergistic with
the others."

Tribune executives are not unaware of the risks,
especially the Internet's threat of cannibalizing traditional
media. But that is a key reason the company has been
aggressive.

"We recognize at some point there will be a percentage of
advertisers who just want to put their ad online," said Tribune
Publishing's Mr. Landon. "We are determined if they place [a classified
employment ad, for example,] only online, they will place it on
CareerPath because they feel it is the best marketplace."

Taking risks in new media is not new for the Tribune. As if
they had just emerged from the same media-training seminar,
Tribune's new-media executives all are quick to point out that the
company historically has never been one to shy from emerging
technologies, such as radio, TV and cable TV.

Tribune partnerships:

CareerPath
Internet-based employment information service
founded with The Boston Globe,Los Angeles Times, The New York Times,San Jose Mercury News and The Washington Post.

Tribune is the second-largest TV station owner in the U.S.
Its recent $1.1 billion purchase of Renaissance
Communications brings its total of owned & operated TV stations to 16, for a
33% share of the nationwide audience.

It also owns WGN radio, WGN-TV, cable station CLTV and the
Chicago Cubs baseball team.

"In the same way we embraced radio in the `20s, TV in the `40s
and `50s and cable more recently, we believe the Internet is not
going to be the CB radio of the `90s. It is a significant and
profound media," Mr. Landon said.